U.S. patent application number 11/879154 was filed with the patent office on 2008-02-07 for profit attribution modeling system.
Invention is credited to Andrew John Olsen.
Application Number | 20080033859 11/879154 |
Document ID | / |
Family ID | 39030425 |
Filed Date | 2008-02-07 |
United States Patent
Application |
20080033859 |
Kind Code |
A1 |
Olsen; Andrew John |
February 7, 2008 |
Profit attribution modeling system
Abstract
A profit attribution modelling system adapted to model the
effect on profitability of a business caused by effective
investment in any one or more of number of factors. The system
displays the representations of the factors, enters a value
representing the profit level of the business, enters a value
representing a proposed investment value in any one of the factors
where a predicted profitability is computed in response to the
altered factor and based upon a predetermined scale of
interrelationships between the factors.
Inventors: |
Olsen; Andrew John; (Fort
Myers, FL) |
Correspondence
Address: |
ANDREW JOHN OLSEN
NMSI
P.O. Box 547
FORT MYERS
FL
33902
US
|
Family ID: |
39030425 |
Appl. No.: |
11/879154 |
Filed: |
July 16, 2007 |
Current U.S.
Class: |
705/36R |
Current CPC
Class: |
G06Q 40/06 20130101;
G06Q 10/10 20130101 |
Class at
Publication: |
705/036.00R |
International
Class: |
G06Q 40/00 20060101
G06Q040/00 |
Foreign Application Data
Date |
Code |
Application Number |
Jul 19, 2006 |
AU |
2006903912 |
Claims
1. A profit attribution modelling system adapted to model the
effect on profitability of a business caused by effective
investment in any one or more of a plurality of factors, the system
comprising a means of displaying representations of said plurality
of factors, means for entering a value representing the profit
level of the business, means of entering a value representing a
proposed investment value in any one of said factors and computing
means whereby a predicted profitability is computed in response to
the altered factor and based upon a predetermined scale of
interrelationships between said factors.
2. A profit attribution modelling system as claimed at claim 1
wherein the system permits entry of values against more than one
factor before the predicted profitability is computed.
3. A profit attribution modelling system as claimed at claim 1
wherein the system comprises means for entry of the predetermined
scale of interrelationships.
4. A profit attribution modelling system as claimed at claim 1
wherein the computing means comprises an electronic computer and
the display comprises a computer monitor, the system further
comprising at least one computer program adapted to cause the
monitor to display representations of said factors on said computer
monitor, and to enable input of said values to be received and to
display on said computer monitor, the program causing computation
of said predicted profitability.
5. A profit attribution modelling system as claimed at claim 1
wherein the scale of interrelationships between said factors is
determined by reference to a study of the profitability performance
of selected organisations over a study period, wherein factor
scores existing in those organisations during the study period are
identified, averages for the factor scores for the selected
organisations are determined and whereby average correspondences
between the factor scores and profitability are determined.
6. A profit attribution modelling system as claimed at claim 5
wherein profitability and factor scores of the group identified by
the study are compared to the average results of the selected
organisations.
7. A profit attribution modelling system as claimed at claim 6
wherein the factor scores of the group are compared with average
factor scores derived from the study of the selected organisations
to establish a deviation for each factor score.
8. A profit attribution modelling system as claimed at claim 7
wherein fields are provided for displaying said deviations.
9. A profit attribution modelling system as claimed at claim 7
wherein the system provides a prediction on the variation of
profitability of the group according to a proposed investment in a
selected factor directed to producing a change in the value of that
factor.
10. A profit attribution modelling system as claimed at claim 1
wherein the system comprises a database program.
11. A profit attribution modelling system as claimed at claim 10
wherein the database program comprises a spreadsheet program.
12. A profit attribution modelling system as claimed at claim 10
wherein the input and display of the data is by a display program
separate from the database program.
13. A profit attribution modelling system as claimed at claim 1
wherein the display of the data is presented as a dashboard
comprising a plurality of analogue representations of the relative
values to be displayed.
14. A profit attribution modelling system as claimed at claim 13
wherein analogue representations are in the form of dials.
15. A profit attribution modelling system as claimed at claim 14
wherein fields are included within the dials to display and/or
input numerical values corresponding to the dials.
16. A profit attribution modelling system as claimed at claim 1
wherein the factors relate to human interaction between personnel
employed by the business.
17. A profit attribution modelling system as claimed at claim 16
wherein the factors concerning human interaction are selected from
employee ratings of at least factors such as Customer Service,
Engagement, Consequences, Coaching, Empowerment, Fair Pay, Regard,
Big Picture Thinking and Training
18. A profit attribution modelling system as claimed at claim 1
wherein the factors relate to customer perception of a product or
service business or market.
19. A profit attribution modelling system as claimed at claim 18
wherein the factors concerning customer satisfaction are selected
from customer ratings of at least factors such as Customer Service,
Proximity, Range, Cleanliness, Loyalty Cards, Rewards System, Green
Products and Facilities.
20. A profit attribution modelling system as claimed at claim 18
wherein the product is an automobile and the factors concerning
customer satisfaction are selected from customer ratings of at
least factors such as Appearance, Quality, Reliability, Power,
Handling, After-Sales Service, Parts Prices and Resale Value.
21. A method for assessing and displaying the effect on
profitability of a business caused by effective investment in any
one or more of a plurality of factors, the method comprising the
steps of: a) identifying for study a relevant group related to the
business; b) having the members of the group participate in a
survey where they rate aspects of the business according to a
plurality of predefined factors; c) entering the responses of the
survey into a computer database program and storing the
information; d) summarizing the accumulated results into factor
scores using formulae that have previously been derived to relate
the factors; e) relating said factor scores to the profitability of
the group; f) identifying changes in profitability that will be
caused by causing changes in on or more of said factor scores.
22. A method as claimed at claim 21 wherein the formulae are
derived from the factors identified by a statistical procedure
known as `factor analysis`.
23. A method as claimed at claim 22 wherein the formulae are
determined by reference to a study of the profitability performance
of selected organisations over a study period, identifying factor
scores existing in those organisations during the study period,
determining average for the results for the selected organisations
and determining an average correspondence between the factor scores
and profitability.
24. A method as claimed at claim 23 wherein profitability and
factor scores of the group identified by the study are compared to
the average results of the selected organisations.
25. A method as claimed at claim 24 wherein the factor scores of
the group are compared with average factor scores derived from the
study of the selected organisations to establish a deviation for
each factor score.
26. A method as claimed at claim 25 wherein a computer system is
used to provide a prediction on the variation of profitability of
the group according to a proposed investment in a selected factor,
as a result of the formulae.
27. A method as claimed at claim 21 wherein the computer database
program is a spreadsheet program.
28. A method as claimed at claim 21 wherein the display of the data
is presented as a dashboard comprising a plurality of analogue
representations of the relative values to be displayed.
29. A method as claimed at claim 28 wherein analogue
representations are in the form of dials.
30. A method as claimed at claim 29 wherein fields are included
within the dials to display and/or input numerical values
corresponding to the dials.
31. A method as claimed at claim 29 wherein the user can directly
change the factor score that shows on any one or combination of
dials, thereby causing the software to use the formulae to
recalculate changes in the abovementioned values that are
associated with the revised factor score changes to thereby allow
the user to explore various intervention scenarios.
32. A method as claimed at claim 31 wherein the results in changes
in factor scores caused by proposed investments are used to
calculate and display `Return on Investment` figure to thereby
enable the user to compare the relative value of alternative
investments in strategies designed to improve the working
experience of staff.
33. A method as claimed at claim 21 wherein the factors relate to
human interaction between personnel employed by the business and
the members of the group comprise members staff of an
organisation.
34. A method as claimed at claim 33 wherein the factors concerning
human interaction are selected from employee ratings of at least
factors such as Customer Service, Engagement, Consequences,
Coaching, Empowerment, Fair Pay, Regard, Big Picture Thinking and
Training.
35. A method as claimed at claim 21 wherein the factors relate to
customer perception of a product or service business and members of
the group comprise relevant customers of the business.
36. A method as claimed at claim 35 wherein the factors concerning
customer satisfaction are selected from customer ratings of at
least factors such as Customer Service, Proximity, Range,
Cleanliness, Loyalty Cards, Rewards System, Green Products and
Facilities.
37. A method as claimed at claim 35 wherein the product is an
automobile and the factors concerning customer satisfaction are
selected from customer ratings of at least factors such as
Appearance, Quality, Reliability, Power, Handling, After-Sales
Service, Parts Prices and Resale Value.
Description
FIELD OF THE INVENTION
[0001] The present invention relates to a system for estimating and
predicting the financial benefit accruing to a business from
effective investment in various factors related to human
interaction within a business. It also relates to a method of for
assessing and displaying the effect on profitability of a business
caused by effective investment in any one or more of a plurality of
factors concerning human interaction between personnel employed by
the business.
BACKGROUND ART
[0002] Most modern businesses employing more than a few personnel
rely on the performance of those personnel for the profitability of
the business. The demands on personnel have become more complex and
it has long been recognized that intelligent and harmonious
interaction between personnel is essential to the successful
operation of the business. Business development consultants have
analysed various aspects of that interaction and have often
recommended to businesses that they take steps to improve at least
certain aspects of that interaction. However, until now, it has
been impractical to predict with any confidence the value of any
benefit that might result from any expenditure made to improve some
aspect of human interaction with a business.
[0003] Recently, there have been a number of studies published
which have attempted to quantify the effect on profitability that
are made by the various factors affecting human interaction. In
particular, David H Maister has described a rather comprehensive
empirical relationship between profitability and various
interaction factors as discovered in a very large study across a
substantial number of businesses. This study has shown that
profitability is directly connected to and predicted by the scores
that staff give on approximately 70 survey questions.
[0004] While it has been appreciated that such studies provide
valuable insights into the interactions within a business, the
application of such information to a business to improve
profitability has previously been an ad hoc process due to the
complexity of the interactions and the difficulty in predicting the
result in a monetary form.
DISCLOSURE OF THE INVENTION
[0005] Accordingly, the invention resides in a profit attribution
modelling system adapted to model the effect on profitability of a
business caused by effective investment in any one or more of a
plurality of factors, the system comprising a means of displaying
representations of said plurality of factors, means for entering a
value representing the profit level of the business, means of
entering a value representing a proposed investment value in any
one of said factors and computing means whereby a predicted
profitability is computed in response to the altered factor and
based upon a predetermined scale of interrelationships between said
factors.
[0006] According to a preferred embodiment, the system permits
entry of values against more than one factor before the predicted
profitability is computed.
[0007] According to a preferred feature of the invention, the
system comprises means for entry of the predetermined scale of
interrelationships.
[0008] According to a preferred embodiment, the computing means
comprises an electronic computer and the display comprises a
computer monitor, the system further comprising a computer program
adapted to cause the monitor to display representations of said
factors on said computer monitor, and to enable input of said
values to be received and to display on said computer monitor, the
program causing computation of said predicted profitability.
[0009] According to a preferred feature of the invention, the scale
of interrelationships between said factors is determined by
reference to a study of the profitability performance of selected
organisations over a study period, wherein factor scores existing
in those organisations during the study period are identified,
averages for the factor scores for the selected organisations are
determined and whereby average correspondences between the factor
scores and profitability are determined. According to a preferred
embodiment, profitability and factor scores of the group identified
by the study are compared to the average results of the selected
organisations. According to a preferred embodiment, the factor
scores of the group are compared with average factor scores derived
from the study of the selected organisations to establish a
deviation for each factor score. According to a preferred
embodiment, fields are provided for displaying said deviations.
[0010] According to a preferred feature of the invention, the
system provides a prediction on the variation of profitability of
the group according to a proposed investment in a selected factor
directed to producing a change in the value of that factor.
[0011] According to a preferred feature of the invention, the
system comprises a database program. According to a preferred
embodiment, the database program comprises a spreadsheet
program.
[0012] According to a preferred embodiment, the input and display
of the data is by a display program separate from the database
program.
[0013] According to a preferred embodiment, the display of the data
is presented as a dashboard comprising a plurality of analogue
representations of the relative values to be displayed. According
to a preferred embodiment, analogue representations are in the form
of dials. According to a preferred embodiment, fields are included
within the dials to display and/or input numerical values
corresponding to the dials.
[0014] According to a further aspect, the invention resides in a
method for assessing and displaying the effect on profitability of
a business caused by effective investment in any one or more of a
plurality of factors concerning human interaction between personnel
employed by the business, the method comprising the steps of:
[0015] a. identifying a group of staff of an organisation required
for study; [0016] b. having the members of the group participate in
a survey where they rate aspects of the work life according to a
plurality of predefined factors; [0017] c. entering the responses
of the survey into a computer database program and storing the
information; [0018] d. summarizing the accumulated results into
factor scores using formulae that have previously been derived to
relate the factors; [0019] e. relating said factor scores to the
profitability of the group; [0020] f. identifying changes in
profitability that will be caused by causing changes in on or more
of said factor scores.
[0021] According to a preferred feature of the invention, the
formulae are derived from the factors identified by a statistical
procedure known as `factor analysis`.
[0022] According to a preferred feature of the invention, the
formulae are determined by reference to a study of the
profitability performance of selected organisations over a study
period, identifying factor scores existing in those organisations
during the study period, determining average for the results for
the selected organisations and determining an average
correspondence between the factor scores and profitability.
[0023] According to a preferred feature of the invention,
profitability and factor scores of the group identified by the
study are compared to the average results of the selected
organisations.
[0024] According to a preferred feature of the invention, the
factor scores of the group are compared with average factor scores
derived from the study of the selected organisations to establish a
deviation for each factor score.
[0025] According to a preferred feature of the invention, a
computer system is used to provide a prediction on the variation of
profitability of the group according to a proposed investment in a
selected factor, as a result of the formulae.
[0026] According to a preferred feature of the invention, the user
can directly change the factor score that shows on any one or
combination of dials, thereby causing the software to use the
formulae to recalculate changes in the above-mentioned values that
are associated with the revised factor score changes to thereby
allow the user to explore various intervention scenarios.
[0027] According to a preferred feature of the invention, the
results in changes in factor scores caused by proposed investments
are used to calculate and display `Return on Investment` figure to
thereby enable the user to compare the relative value of
alternative investments in strategies designed to improve the
working experience of staff.
[0028] According to a preferred embodiment, the factors relate to
human interaction between personnel employed by the business.
According to a preferred embodiment, the factors concerning human
interaction are selected from employee ratings of at least factors
such as Customer Service, Engagement, Consequences, Coaching,
Empowerment, Fair Pay, Regard, Big Picture Thinking and
Training
[0029] According to a preferred embodiment, the factors relate to
customer perception of a product or service business or market.
According to a preferred embodiment, the factors concerning
customer satisfaction are selected from customer ratings of at
least factors such as Customer Service, Proximity, Range,
Cleanliness, Loyalty Cards, Rewards System, Green Products and
Facilities. According to a preferred embodiment, the product is an
automobile and the factors concerning customer satisfaction are
selected from customer ratings of at least factors such as
Appearance, Quality, Reliability, Power, Handling, After-Sales
Service, Parts Prices and Resale Value.
[0030] The invention will be more fully understood in the light of
the following description of one preferred embodiment.
BRIEF DESCRIPTION OF THE DRAWINGS
[0031] The description is made with reference to the accompanying
drawings, of which:
[0032] FIG. 1 is a diagrammatic representation of the components of
a computer system according to the embodiment;
[0033] FIG. 2 is a diagrammatic representation of the
interrelationships concerning human interaction between personnel
employed by the business;
[0034] FIG. 3 is a drawing of the features displayed on the monitor
of a computer according to the first embodiment;
[0035] FIG. 4 is a first representation of the panel displayed on a
monitor in the first phase of execution of a program of the
embodiment of the invention;
[0036] FIG. 5 is a representation of the panel of FIG. 3 when
operating in a second phase;
[0037] FIG. 6 is an alternative representation of the panel of FIG.
5 when operating in a second phase;
[0038] FIG. 7 is a representation of the panel of FIG. 3 when
operating in a third phase; and
[0039] FIG. 8 is a representation of the panel as shown FIG. 5
further encompassing arrows indicating the interrelationships which
are calculated by the program of the embodiment.
DETAILED DESCRIPTION OF PREFERRED EMBODIMENT
[0040] The embodiment of the invention is described with reference
firstly to FIG. 1 and comprises a program for a computer system 1
having a display means in the form of a computer monitor 2, input
means comprising a key board 3 and a device capable of controlling
a cursor representation on the monitor such as a computer mouse 4,
a central processing means 5 to enable processing of a computer
program and computation of results. The program is typically stored
on the hard disc 6 of the computer.
[0041] The computer program of the embodiment is directed to
determining and displaying interactively the profit which is
predicted to result from effective investment in one of more of
factors concerning human interaction between personnel employed by
the business. The particular factors and their interrelationship
that are used within the embodiment are derived from those
identified by David H Maister in his book "Practice What You
Preach: What Managers Must Do To Create A High Achievement Culture"
(2001 Free Press Simon & Schuster NY, ISBN 0-7432-1187-1). The
embodiment also provides a method of predicting and displaying the
effect on profitability of a business caused by effective
investment in any one or more of a plurality of factors concerning
human interaction between personnel employed by the business.
[0042] This system and method enable interactive use in a way that
is easily comprehended by an unskilled person viewing the displayed
results. The interactive nature enables a user to first try one
effective investment strategy and thereafter view the predicted
results and then try an alternative strategy and view the
alternative results. The system comprises a means for displaying
representations of said plurality of factors, means for entering a
value representing the profit level of the business, means of
entering a value representing a proposed effective investment value
in any one of said factors and computing means whereby an estimated
or predicted profitability is computed in response to the altered
factor and based upon a predetermined scale of interrelationships
between said factors.
[0043] The factors identified by Maister are listed below. [0044]
A. Training & Development; [0045] B. Long-term Organisation
[0046] C. Enthusiasm, Commitment & Respect; [0047] D. Fair
compensation; [0048] E. Empowerment [0049] F. Coaching [0050] G.
High Standards [0051] H. Employee Satisfaction; [0052] I. Quality
& Client Relationships
[0053] Maister has identified that these factors are interrelated
by a complex set of relationships--if one item is varied then in
most cases more than one of the other factors is directly affected.
These interrelationships are illustrated in FIG. 2. This set of
interrelationships is difficult to apply in a conventional
manner.
[0054] Maister's factors have been adopted within the embodiment
and re-defined as shown below: TABLE-US-00001 Factor Description A
Training Ethos 21 Skilling/training opportunities, high quality is
required; Managers committed to training B Big Picture Ethos 22
Strategic clarity, long term thinking, effective investment in long
term future C Regard Loyalty 23 Mutual respect, boss able to get
best from each one, boss earns loyalty, high morale D Just Rewards
(Pay) 24 Recognition and financial reward is fair, goes where is
deserved, including in my case E Empowerment 25 Authority
delegated, initiative stimulated, openness is encouraged F Coaching
Smarts 26 Supervisor is highly trusted coach, close conversations,
fosters team health G Consequence Ethos 27 Very high skills and
standards, poor performance is not tolerated H Engagement 28 feel
challenged, achievement, satisfaction, committed to career here I
Client-Servant Ethos 29 Consistently superior product and service
in actual practice, sacrifice for client
[0055] To aid visualisation of these factors the level of the nine
factors are represented graphically. In the embodiment, when the
program is executed, a display is given which is initially in the
form of FIG. 3. As shown in FIG. 3, the program of the embodiment
displays a panel 11 with a group of 11 circular icons representing
the nine factors 21-29, plus a % change icon 30 representing the
percentage change that occurs when a new calculation is made and a
$FP icon 31 to represent the financial performance index of the
business. Each dial (in the drawings, as enumerated for the
Client-Servant Ethos 29, only) has a radially oriented indicating
member 33 and a graduated scale 34 to generally represent dial
gauges of the type commonly in use in the automotive industry or
industrial industry. The graduated scale has six major markings 35
and a plurality of minor markings 36 subdividing the major scale.
Distinguishing coloured markings 37 on the graduated area help a
user to identify an average or median level and the quartile levels
for that particular factor. It will be appreciated that
representations enable a graphical representation to be given of
the relative level of each factor. It will also be recognised that
although this embodiment has selected representations of dial
gauges as the means to graphically represent the relative value of
a factor, alternative representations such as a columnar bar chart
might also be chosen.
[0056] The display panel 11 will also typically have identification
markings (not shown) to identify the business consultant and
descriptive text explaining certain aspects of the display panel
11. Optionally, additional explanatory text is displayed within a
text box upon the display panel 11 upon initiating an appropriate
trigger--in the embodiment, being a button within the centre of
each of the nine icons 21-29. FIG. 4 shows the display panel after
the central button 38 of the Engagement icon 28 has been triggered
to display a text panel 39 with an explanation of the Engagement
icon. In addition, it will be seen that a further numeric display
40 field is displayed together with an up-down arrow pair. The
purpose of this field is discussed later in this specification.
[0057] When the program is first run, it is populated with a set of
data values for each factor which represent the state of the
business under consideration. These factors are determined by a
business consultant in advance, and in the preferred embodiment
these factors are a set of factors based upon Maisters factors. The
financial information at the time will be ascertained from the
client. The business consultant will also have undertaken a survey
by means of a questionnaire to assess the status of each of the
abovementioned factors as perceived by the employees according to
predetermined criteria. The response scales read as follows: [0058]
1=Strongly Agree [0059] 2=Disagree [0060] 3=Somewhat Disagree
[0061] 4=Somewhat Agree [0062] 5=Agree [0063] 6=Strongly Agree
[0064] These responses are reflected on the respective dial gauges
by the major markings 35.
[0065] The data may be entered by means of a data entry screen (not
shown), or may alternatively be read from a pre-established data
file accessed by the program. According to one adaptation, the data
is read from a data file if it is found on the computer or else a
data entry screen is displayed. After the data is entered, it is
then saved into a data file which then accessed by the program. In
this way, it is not necessary to re-enter data once it has been
entered a first time.
[0066] The display panel 11 also displays a series of display
fields 41 representing the various data items concerning the
particular business being considered. The data items shown on FIG.
3 are: TABLE-US-00002 Organisation name 41 Name of department or
group of the organisation 42 Date 43 Number of staff 44 Capital of
the Organisation 45 Net profit now 46 new 47 Profit/employee now 48
new 49 Return on Capital now 50 new 51 Net profit/Synthetic NP
52
[0067] A typical procedure undertaken by the business consultant in
obtaining data and using the embodiment might follow the steps
listed below. [0068] 1. A group of staff are identified for study.
[0069] 2. These individuals each take a survey, optionally by
pen-&-paper or web-based, in which they rate many aspects of
their work life on a response scale (in this case, around 80 items
on a 6 point scale). [0070] 3. These responses are entered into a
computer spreadsheet and stored. [0071] 4. The responses are then
summarized into `factor scores` using a formula derived from the
factors identified from the original research by the statistical
procedure known as `factor analysis` (in the Maister case, 10
factors emerged). [0072] 5. The average factor scores found in the
original database are subtracted from this new group's factor
scores to give a score distance (+ or -) on each factor. [0073] 6.
This score distance is entered, along with a real or hypothetical
net profit figure for that group, into another formula that
calculates for each factor separately the probable dollar value of
each distance based on the structural equation model that was
created in the original research (in this case, Maister's) to show
the causal paths of profit. [0074] 7. The same procedure is used to
calculate a score distance from the factor scores of the most
profitable businesses in the original database (e.g., the top 20%
of performers, or the industry benchmark), rather than the score
distance from the average. [0075] 8. A dashboard software product
is used, for example "Crystal Xcelcius" provided by Business
Objects SA to take data from the cells in the spreadsheet
containing the factor scores for each factor and display them on a
radial dial. [0076] 9. The same software is used to take each of
the dollar values described in the above steps and display them in
2 panels within the same dials. [0077] 10. By using a computer
mouse arrow to move a slider and/or a toggle on the same dashboard
display software, the user can directly change the factor score
that shows on any one or combination of dials, thereby causing the
software to use the structural equation modelling formulas to
recalculate changes in the abovementioned dollar values (including
a new net profit figure) that are associated with the revised
factor score changes. This allows the user to explore various
intervention scenarios. [0078] 11. By entering a dollar value into
the `Investment` field on the dashboard, the abovementioned changes
to one or more dollar values on the factor dials and/or the net
profit figure are entered into a formula and used to calculate a
`Return on Investment` figure that shows in the ROI field on the
dashboard. This allows the user to compare the relative value of
alternative investments in strategies designed to improve the
working experience of staff in order to optimize well-being,
productivity and profit.
[0079] This information described above provides the observer with
a financial overview of the business under consideration. After the
consultant has discussed the figures with his client, the program
can then be signalled to go into a second phase, as shown in FIG. 5
and FIG. 6. In the second phase, two additional numeric display
fields are provided in the centre of each of the factor icons
21-29, an upper field 61 and a lower field 62. As shown in FIG. 5,
the additional pair of numeric display fields may be signalled to
be displayed in relation to one icon at a time, or alternatively,
they may be caused to all display at once as shown in FIG. 6.
[0080] The computer program performs a comparison of the value
represented on the dial against a corresponding stored value that
represents the extent to which that company's net profit is
currently attributable to that factor, based on the causal
relationships between the factors and net profit derived from the
study of Maister.
[0081] The upper field 61 displays a comparison relative to the
corresponding value derived by the top 20 businesses of the world
as identified by Maister in his study, while the lower display
field 62 displays a comparison relative to the corresponding value
derived by all businesses of Maister's study. This comparison
thereby provides the client with guidance of where further
effective investments should best be made.
[0082] After the consultant has discussed the figures with his
client, the program can then be signalled to go into a third phase,
as shown in FIG. 7. In the third phase, the program causes to be
displayed within each of the factor icons, a single display field
65. In this field there is displayed a value calculated by the
program that represents the change in profit that would result if
the business was to cause a shift in performance of a particular
factor by a predetermined amount (for instance, by half of the
distance between consecutive major markings 35). Again, the display
fields 65 may be caused to be display successively or all together
as shown in FIG. 7.
[0083] In each of the phases, when the central button of any of the
factor icons is activated, a numeric display field appears together
with an up-down arrow pair. Initially, the value display in this
field is 0. If the up arrow is activated by a single click, the
reading of the indicating member on the corresponding factor icon
will be advanced by one minor graduation on the scale. The program
will then calculate and display values in the fields: Net
profit--new 47, Profit/employee--new 49 and Return on Capital--new
51. As well, new values will be calculated and displayed for each
of factor icons, according to the predetermined interrelationships
liking the factors. Also, if a dollar figure has been entered into
the `Investment` cell, the `Return on Investment` cell will show a
recalculated dollar value. In this way, the effect on the business
of effective investment in any one or more of the factors can be
considered and assessed in a way that is readily visualised, as
well as being expressed in dollar values. This analysis can be
conducted in an interactive manner, repetitively until the client
is satisfied with the predicted outcome.
[0084] It will be appreciated that the program of the embodiment
must perform calculations which reflect the interrelationships
identified by Maister and shown in FIG. 2. The interrelationships
of the program are illustrated in FIG. 8. The various arrows shown
in FIG. 8 identify the way in which the factors are interconnected.
The arithmetic values determined by Maister are then used to
calculate the particular values and relative values of each factor.
The program of the embodiment includes coding whereby these
calculations are performed.
[0085] It can be seen from the above that the preferred use of the
embodiment is the calculation of monetary values for each of the
causal factors of the profit of a group. Another variation covered
by this invention is the use of the identical procedure to
calculate monetary values for the causal factors of buyer spending.
For example, structural equations showing the causal path of
factors involved in buying a product (say, from surveys of people
intending to buy a car) could calculate the monetary value of each
causal factor and could also do so via live modelling. The only
visible difference between this adaptation and the embodiment
described is that the dial labels and definitions would be have a
different appearance.
[0086] Those skilled in the art will recognize that there are a
number of ways to implement the invention. It will be recognized
that the embodiment incorporates a database in which the values of
various parameters are stored and a "front-end" enabling relevant
data to be input, selected and displayed by computer according to
the various functions defining the interrelationships as discussed
above. Implementation of such a system might be achieved by
traditional programming techniques for such systems. However, such
techniques require a skilled operator to modify the parameters.
According to the embodiment, the database facility is provided by
means of a proprietary spreadsheet program such as the program
Excel supplied by Microsoft Corporation. This program enables data
to be stored in "cells" and the results of calculations to be
placed in other cells. Functions and interrelationships are easily
established and modified. However, while setting up the spreadsheet
with such a program is relatively straightforward, the manner of
presentation of the information is rather limited. Preferably,
another program is used to display and input the data held in the
spreadsheet program. In the embodiment, the presentation program
"PowerPoint" of Microsoft Corporation is used to provide this
function. In the embodiment, a third program, "Crystal Xcelcius"
provided by Business Objects SA is used to provide the
interconnection between the two Microsoft programs. As a result,
the time required by a skilled programmer is substantially reduced
or even eliminated, as these programs are designed to be used by
people who are not programming professionals.
[0087] It is to be realised that the description of the invention
as given above with respect to the embodiment may be adapted in
many ways. For instance, while particular set of factors and their
interrelationships proposed by Maister have been derived from
extensive study and are considered by the Applicant to be
particularly suited for the purpose of the present embodiment, it
will be recognized that the invention is not restricted to the
factors and interrelationships of Maister. Should other studies
identify other factors and/or interrelationships, the embodiment
may be easily amended to adopt the alternative factors and
interrelationships. Further, it will also be recognised that
although this embodiment has selected representations of dial
gauges as the means to graphically represent the relative value of
a factor, alternative representations such as a columnar bar chart
might also be chosen. It is to be appreciated that all such
adaptations are to be considered as being within the scope of the
invention as herein described.
[0088] However, it will also be appreciated that invention may be
adapted more broadly than the adaptations of the embodiment as
described above. It is to be appreciated that the invention may be
applied in other ways than by the assessment of employee
perceptions and the factors considered may be quite different from
those given above. For instance, embodiment may be adapted to
consider the perceptions of customers of a business. Customers
surveys may be conducted to ascertain customer perception of the
business judged against a number of factors. The factors might be
slected to be appropriate for the particular kind of business. In a
product directed business they might comprise Customer Service,
Proximity, Range, Cleanliness, Loyalty Cards, Rewards System, Green
Products and Facilities. Typical factors might be modified for
assessment of a service business. This list of factors may be
further adapted for specific industries. For instance, if an
automotive business is considered, the factors might be Appearance,
Quality, Reliability, Power, Handling, After-Sales Service, Parts
Prices and Resale Value. As in the embodiment, the relationship
between the factors and the profitability is determined from a
relevant study of the industry to provide a standard against which
a particular industry can be compared and to ascertain the
interactions existing between the factors.
[0089] Throughout the specification, unless the context requires
otherwise, the word "comprise" or variations such as "comprises" or
"comprising", will be understood to imply the inclusion of a stated
integer or group of integers but not the exclusion of any other
integer or group of integers.
* * * * *